I'm curious how HN readers would solve the looming insurance problem.
Southern US states like Florida are becoming uninsurable due to climate risks raising the price above what residents can afford, which raises insurance costs for the rest of us in other states. The same thing is happening with car insurance, where the wealthy drive up prices on new vehicles to $50-100,000+, forcing the rest of us to carry higher liability coverage. And with medical insurance, where poor lifestyle choices, environmental threats like pollution/preservatives and monopoly pressures from not having universal coverage cause those of us in good health to pay $6,000/yr or more and a multi-thousand dollar deductible, which mostly defeats the point of having insurance.
My feeling is that we'll either set reasonable limits for what will be reimbursed (around the the median cost of what's being insured) or insurance will divide into a two-tier system where the wealthy are covered by gold plans while the poor pay to keep the system going and receive pennies on the dollar in coverage. Which is why I feel that tying the price of insurance to income might solve many of these problems.
But insurance used to work, so I feel like there's a deeper explanation or solution that I'm not seeing.
> states like Florida are becoming uninsurable due to climate risks raising the price above what residents can afford, which raises insurance costs for the rest of us in other states.
What ought to happen (IMO) is that the first clause and the second clause should be divorced from each other. If insurance premiums are unaffordably high in Florida, people in Florida have the choice to pay it anyway, self-insure [if they're able], move, or start another insurance company to try to drive down prices.
Smart insurance companies, if they can't make a profit in Florida, should pull out of Florida rather than subsidizing losses in Florida with increased profits (read: higher premiums) in other states.
Smart consumers in other states will place their policies with insurance companies who are not subsidizing actuarially unsound risks in other states.
If your auto insurance company said "even though actuarial data supports its use, we're going to stop using DUI convictions and other serious traffic convictions to influence rates. We expect this will garner us significant new business from a population currently being charged more money for these surchargable events at only a modest increase in cost for other customers" and you were a driver with no such events on your record, would you at least shop for another insurance company? I would. (My insurance company has already stopped writing new policies in Florida and, from what I can tell from a quick Google, is only renewing existing policies for owner-occupants of those properties.)
> But insurance used to work, so I feel like there's a deeper explanation or solution that I'm not seeing.
NFIP has been in place since 1968. These low lying, flood and hurricane places have not been insurable for 50+ years. All the other federal taxpayers have been subsidizing people living there.
An insurance company's one and only incentive is to charge as much as possible while paying out as little as possible, iow to profit as much as they can. Actually protecting the client or their property does not factor into the equation at all.
If we nationalized insurance, maybe the entire country can subsidize these extremely high risk areas. We can also add a legal mandate that insurance not operate for profit, and should change premium rates to scale up and down with the real amount paid out. Or something, I'm no money surgeon.
And before someone blusters about paying for other people's shit: yes, that's what a healthy society does. We should all care about the wellbeing of others. Feel free to propose an alternative solution that doesn't involve depopulating all of our low-lying lands and dumping those citizens somewhere with no housing, no job, and no money and just ignoring the suffering and death this will cause.
It'd be nice to have cheaper vehicle options but it seems the entry-level market for virtually every size has disappeared over the past decade, and EVs won't be entry-level for a long time.
Southern US states like Florida are becoming uninsurable due to climate risks raising the price above what residents can afford, which raises insurance costs for the rest of us in other states. The same thing is happening with car insurance, where the wealthy drive up prices on new vehicles to $50-100,000+, forcing the rest of us to carry higher liability coverage. And with medical insurance, where poor lifestyle choices, environmental threats like pollution/preservatives and monopoly pressures from not having universal coverage cause those of us in good health to pay $6,000/yr or more and a multi-thousand dollar deductible, which mostly defeats the point of having insurance.
My feeling is that we'll either set reasonable limits for what will be reimbursed (around the the median cost of what's being insured) or insurance will divide into a two-tier system where the wealthy are covered by gold plans while the poor pay to keep the system going and receive pennies on the dollar in coverage. Which is why I feel that tying the price of insurance to income might solve many of these problems.
But insurance used to work, so I feel like there's a deeper explanation or solution that I'm not seeing.